Kerkorian offers $870 mil for 4.8% for General Motors
NEW YORK — Fresh off a triumphant multibillion-dollar studio sale, Kirk Kerkorian is flexing his financial chops in the auto industry.
Kerkorian’s Beverly Hills-based holding company, Tracinda Corp., offered Wednesday to pay $870 million for 4.8% of General Motors — a deal that would boost his stake in the giant automaker to nearly 9%.
While GM didn’t have any immediate comment, the company is said to be far from pleased at Kirk’s advances. Wall Streeters expect a fight. “Given GM’s still considerable economic and political clout, we expect this to be a long, drawn-out battle,” one analyst said.
Billionaire financier Kerkorian, 87, is worth an estimated $8.9 billion, according to Forbes magazine, and he is Tracinda’s sole shareholder. He’s best known for his Las Vegas investments and his on-again, off-again ownership of MGM.
Kerkorian recently sold the Lion to a consortium including Sony, Comcast and three financial firms for $4.8 billion in cash — a deal that cemented his reputation as a financial wizard.
As a result, CNBC went bonkers Wednesday over Kerkorian’s GM move and investors started rethinking their positions in the battered auto industry. GM’s stock has been hard hit by stiff competition and lots of red ink.
News that Kerkorian had offered to buy up to 28 million shares for $31 a share in cash batted GM shares skyward. They surged $5.03, or 18%, to $32.80. GM’s move, its largest single-day gain in more than 40 years, was mostly responsible for the 127.69 point uptick in the Dow Jones Industrial Average.